Asian stocks rallied and precious metals rebounded as some stability returned to markets on Tuesday, a day after US-Iran tensions, a Federal Reserve chief nominee and a partial shutdown in Washington brought volatility to trading floors.

In Hong Kong, the benchmark Hang Seng Index ended trading for the day up 59 points, or 0.22 percent, at 26,834.

However, the China enterprises index was down 27 points, or 0.3 percent, at 9,053 and the tech index was down 59 points, or 1.07 percent, at 5,467.

Across the border, the benchmark Shanghai Composite Index ended Tuesday up almost 52 points, or 1.29 percent, to 4,067.

The Shenzhen Component Index was 302 points, or 2.19 percent, up at 14,127 while the ChiNext Index, tracking China's Nasdaq-style board of growth enterprises, was up 60 points, or 1.86 percent, at 3,324.

Japan's Nikkei share average climbed 2,065 points, or 3.92 percent, to close at a record high 54,720, rebounding from a decline posted in the previous session, after the sell-off of precious metals paused.

In Seoul, the benchmark Korea Composite Stock Price Index ended up 338 points, or 6.84 percent, at 5,288, marking its highest close on record and the biggest daily percentage rise since March 24, 2020. The tech-rich market has climbed around 25 percent already this year.

Gains were led by titan Samsung's 11 percent surge and chipmaker SK Hynix's 9.3 percent advance.

The return of some calm to markets on Tuesday followed a rally in New York, which came thanks to figures showing US manufacturing activity grew in January at its fastest pace since 2022. It also marked the first expansion in 12 months.

A return into all things AI provided a huge boost after trader concerns about a bubble in the tech sector saw them offload big-name firms. However, they remain on edge about the vast sums pumped into the AI arena as questions swirl about when they will see profits.

Monday's "decline wasn't about the fundamentals of the AI and semiconductor sectors. It happened because liquidity-sensitive assets such as gold and silver plunged sharply", wrote Chung Hae-chang, analyst at Daishin Securities. (AFP/Xinhua)